Evonik threatens to scrap float

THE OWNERS of German chemicals firm Evonik may pull the plug on an initial public offering (IPO) which, when announced, was billed as Europe’s biggest flotation in more than a year.

“The performance of financial markets since the end of May has added to the uncertainty whether enough proceeds are achievable that reflect the value of Evonik,” the RAG Foundation said yesterday. “The certainty of a flotation based on an appropriate valuation of Evonik is a prerequisite of the IPO.”

Sources close to the matter have said Evonik is looking to raise as much as €5bn (£4.04bn).

RAG said in April last year it was preparing for an IPO of Evonik, but put the plans on ice in September due to weak markets.

Sources close have said Evonik’s owners hope the IPO will value the chemicals group at around €15bn.

According to two people on RAG’s board, investors are not willing to pay anything close to that and are rather looking at a valuation of around €12bn. One banking source said that the threat to pull the IPO is all part of a strategy designed to achieve the fuller valuation. Another meeting of RAG’s board is planned for 18 June.